BE CAREFUL WHO YOU BUY FROM

HOW YOUR BUSINESS PURCHASES CAN ULTIMATELY DEFINE ITS SUCCESS.

How your business purchases can ultimately define its success.

There was a time when business purchasing meant getting the stuff we needed as fast and cheap as possible. Operating like that these days misses opportunities, and is an accident waiting to happen. How bad can it be if procurement goes awry? Consider these examples.

In 2007 a New York Times photographer turned up at an obscure industrial site in India. Workers were forging iron at 1200°C in open furnaces with no safety gear. They didn’t have shirts or shoes, let alone goggles. The journalist noticed they were making manhole covers for New York City. The ultimate customer was NYC’s Department of Environmental Protection.

In 2010 a spoof Greenpeace ad for the KitKat chocolate bar featured people munching on orangutan fingers. It went viral.

The Economist noted: “Nestlé had two weak spots: a muchloved global brand and insufficient knowledge of its supply chain.”

The company had to drop suppliers and work to tighten standards and safeguards in the palm industry.

In 2013 the global fruit giant Dole put stickers on its bananas in New Zealand, effectively declaring them an ‘ethical choice’. However, an independent investigation uncovered questionable labour rights and non-existent certifications.

Think Nike and sweatshops, McDonald’s and deforestation, diamonds and blood. In many cases the mud and blood sticks around long after repeated and valiant attempts are made to clean it off.

This happens to big corporations. They have legions of supply chain staff and brand managers. So it could happen to you.

What might you have lurking in your supply chain that could bite you if discovered?

Sam McGlennon has a PhD in governance of supply chains and trade. He is project lead for the Sustainable Business Network’s Smart Procurement project.